Military Modernization & Cyber Threats Will Drive Romanian Defense Sector Growth to 2018

Wednesday 3 July 2013, Amsterdam

The budgetary limitations imposed by recent economic turmoil has seen Romanian defense expenditure contract from US$3 billion in 2008 to US$1.7 billion in 2013. Despite this, the demand for military modernization, combined with rising concern about Cybersecurity, is expected to drive growth at a CAGR of 2% over the next five years, according to this new report: Future of the Romanian Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2018.




Modernization

Despite Romania’s budgetary constraints, the country is undertaking the restructuring of its armed forces. This process has three stages, of which one was already accomplished in 2007, with the second stage expected to finish by 2015; the final stage is anticipated to complete by 2025. The program is designed with the aim of modernizing the Romanian armed forces through the acquisition of more technologically advanced equipment that meets NATO standards, at the expense of the number of armed personnel. It should be noted that despite these cutbacks, the Romanian military is still expected to procure second-hand military equipment to 2018.

Cyber Security

Cyber threats have recently become an area of concern, and warrant serious consideration by the government. In 2012, a loss of US$118.9 billion was recorded globally as a result of cyber warfare. Most of the NATO states that are dependent on electronic communication are looking for solutions to counter this threat.

This report is the result of an extensive research covering the defense industry. It offers in-depth analysis of:

• Market opportunity and attractiveness: detailed analysis of the current industry size, and growth expectations during 2014-2018, including highlights of key growth stimulators. It also benchmarks the industry against key global markets and provides detailed understanding of emerging opportunities in specific areas.
• Procurement dynamics: trend analysis of imports and exports, together with their implications and impact on the Romanian defense industry.
• Industry structure: five forces analysis of imports and exports, together with their implications and impact on the Romanian defense industry.
• Market entry strategy: analysis of the possible ways to enter the market, together with detailed descriptions of how existing companies have entered the market, including key contracts, alliances, and strategic initiatives.
• Competitive landscape and strategic insights: analysis of the competitive landscape of the defense industry in Romania, providing an overview of key defense companies (both domestic and foreign), together with insights such as key alliances, strategic initiatives, and a brief financial analysis.
• Business environment and country risk: a range of drivers at country level, assessing business environment and country risk. It covers historical and forecast values for a range of indicators, evaluating business confidence, economic performance, infrastructure quality and availability, labor force, demographics, and political and social risk.  

In 2010, a separate division was created within NATO to deal with the emerging security risks with issues related to cyber defense, energy security, non-proliferation of weapons of mass destruction, and terrorism. Romania’s NATO ambassador suggested that each NATO state invest collectively in advanced equipment and technology to combat cyber threats within the NATO alliance system. This is expected to be a significant driver of Romanian defense expenditure for the next decade.